Dubai: Kabir Mulchandani doesn’t let himself get too distracted by the odds. Otherwise, he would not have committed to paying Dh975 million on an existing hotel property in Switzerland.
Because the hospitality sector in that picture-perfect European country is hugely competitive… and getting an entry into that space is even more so. The costs can be prohibitive and returns could take an awfully long time.
None of which fazes Mulchandani, after acquiring the Zurich hotel, which had once hosted Freddie Mercury and Mohammed Ali. “We did have other options - we have been exploring the right asset to roll out our award-winning concept in Switzerland for over a year,” Chairman of Five Holdings, which operates two hotels in Dubai – on the Palm and Jumeirah Village Circle.
This has to be the biggest deal so far by a UAE based privately-owned business so far this year. There have been quite a few in the government- and government-allied space, despite the overhang of the COVID-19 pandemic.
“We are pleased to have found the right asset in the right location. We are looking forward to open and operate our new lifestyle and dining destination concept in Europe under the FIVE brand, and with that, to create a destination for people from the city, Swiss visitors and international guests alike.”
The restored hotel, featuring 87 suites, is scheduled for an opening in the third quarter of 2021. The expectation is that by then the global travel and tourism scene would have settled down appreciably, and thus create a more favourable environment for the hotel to operate in.
But Mulchandani is insistent he has no plans to share the risks. “We won’t bring any new investors on board - we are financing the project through debt and equity,” he said.
“The hotel has an iconic history and has been home to several celebrities,” he added. “We are determined to revive this glamorous past with an interior focussed makeover, to infuse a modern flavor of food, art and background music to Switzerland’s tradition in luxury tourism.
“However, it is also important to us to create a product that caters to the Swiss market and incorporates its roots.”
In the thick of it
The two existing Five properties have proved popular with jetsetters and as a venue for high decibel events. Occupancy levels had been averaging in the high 70-80 per cent, according to sources. But the pandemic have brought activities down and room demand across the industry.
It will be interesting to see how Mulchandani and Five manage to transfer the Five ethos – of young and trending - to a storied hotel asset in Zurich.
He has a ready answer to that - “Having welcomed more than 5,000 Swiss travelers at both of our Dubai properties, we are confident that this is a great step for our brand to grow and to offer versatile experiences to all of our guests. [That] includes our strong loyal customer base of 86,337 Five Life loyalty members all over the world.”